Shekel's strength due to current account surplus

A six-month rally in the shekel is due to Israeli exports and the current account surplus and there is no evidence of investors manipulating the currency, said Barry Topf, head of the central bank's Foreign Exchange Activity Department.

The shekel has gained 11 percent against the dollar since its weakest point for the year in April, and was trading at 3.7939 against the US dollar on Wednesday afternoon.

"It's no miracle that the shekel is strengthening," Topf said at a Finance Ministry conference in Jerusalem on Wednesday. "There is a surplus in the current account. I haven't seen any evidence of manipulation or a speculative attack."

Israel posted its fourth consecutive current account surplus in the second quarter, the Central Bureau of Statistics said on September 14. The surplus is expected to more than triple to $6.9 billion this year from 2008, the Bank of Israel said on September 1.

The central bank began buying foreign currency in March 2008, and had doubled reserves to about $60b. by the end of September. The purchases had helped Israel weather the global crisis, Topf said.

The bank aims to return to a policy of non-intervention in the currency market, which it maintained for 11 years prior to 2008, he added.